1997 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-15-1997

Union Pacific RR v. Ametek Inc

Precedential or Non-Precedential:

Docket 96-7015

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1

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_________________ 

No. 96-7015 

_________________ 

UNION PACIFIC RAILROAD CO.; MISSOURI PACIFIC RAILROAD CO.; 

NORFOLK AND WESTERN RAILWAY CO.; SOUTHERN RAILWAY CO.; BURLINGTON 

NORTHERN RAILROAD CO.; CONSOLIDATED RAIL CORPORATION; 

CSX TRANSPORTATION CO. 

 

v. 

AMETEK, INC.; UNITED STATES OF AMERICA; 

SURFACE TRANSPORTATION BOARD 

Union Pacific Railroad Co.; Missouri Pacific Railroad Co.; 

Norfolk & Western Railway Co.; Southern Railway Co.; Burlington 

Northern Railroad Co.; Consolidated Rail Corporation, 

 Appellants. 

_________________ 

An Appeal from the United States District Court 

for the Middle District of Pennsylvania 

D.C. No. 90-cv-1396 

________________ 

Argued September 18, 1996 

Before: NYGAARD, ROTH, AND ROSENN, Circuit Judges

 Filed January 15, 1997 

_________________ 

Paul D. Keenan, Esquire (argued) 

Buchanan Ingersoll, P.C. 

Two Logan Square, 12th Floor 

18th and Arch Streets 

Philadelphia, PA 19103 

Counsel for Appellants 

James E. Howard, Esquire (argued) 

William R. Matthews, Esquire 

Kirkpatrick & Lockhart, LLP 

One International Place 

Boston, MA 02110-2637 

Counsel for Appellee Ametek, Inc. 

Anne K. Bingaman, Assistant Attorney General 
2

John J. Powers, Esquire 

John P. Fonte, Esquire 

Department of Justice 

Washington, DC 20530 

Counsel for Appellee United States of America 

Henri F. Rush, General Counsel 

Evelyn G. Kitay, Esquire (argued) 

Surface Transportation Board 

Washington, DC 20423-0001 

Counsel for Appellee Surface Transportation Board 

 _________________ 

 OPINION OF THE COURT 

 _________________ 

ROSENN, Circuit Judge. 

 The appeal in these consolidated cases raises questions 

of first impression in this circuit relating to the symbiotic 

power of a United States district court and the Interstate 

Commerce Commission (ICC)1 to render judgment for demurrage fees2

against an entity which is not a party to any transportation 

contract with a railroad. The plaintiffs, six national freight 

carriers (the Interline Railroads) sued Ametek, Inc. in the 

 

1. The ICC Termination Act of 1995 (ICCTA), Pub. L. No. 104-88, 

109 Stat. 803, abolished the ICC and transferred many of its rail 

functions to the Surface Transportation Board (STB). The 

demurrage functions at issue in this proceeding which were 

formerly performed by the ICC are vested in the STB by virtue of 

49 U.S.C. § 11122, as reenacted by the ICCTA. We will refer to 

the agency as the ICC. 

2. As to railroads, demurrage is "a charge exacted by a carrier 

from a shipper or consignee on account of a failure to load or 

unload cars within the specified time prescribed by the 

applicable tariffs . . .." Black's Law Dictionary 432 (6th ed. 

1990). Railroads charge shippers and receivers of freight 

"demurrage" fees if the shippers or receivers detain freight cars 

on the rails beyond a designated number of days. 
3

United States District Court for the Middle District of 

Pennsylvania to recover $297,270 allegedly due under a demurrage 

tariff issued by the Panther Valley Railroad Company (Panther 

Valley), now defunct. Panther Valley had assigned its demurrage 

claim against Ametek to the Interline Railroads. Ametek receives 

plastic materials by rail at Nesquehoning, Pennsylvania which it 

processes and then ships by rail to the material suppliers' 

customers. 

 The district court, on motion of Ametek, referred one 

issue to the ICC: the reasonableness of a demurrage charge. The 

ICC, however, determined preliminarily that the tariff had no 

application to Ametek because it was neither the consignor nor 

consignee of the shipped goods, and had not assumed contractual 

liability. The district court adopted the ruling of the ICC and 

concluded that Ametek had not entered into any separate agreement 

obligating it to pay the demurrage fees. It therefore entered 

summary judgment for Ametek and the ICC and denied the Interline 

Railroads' motion for summary judgment. We affirm. 

I. 

 The demurrage charges assigned by Panther Valley 

allegedly accrued under its tariff during 1987 through 1989 

inclusive.3 Ametek's customers ship the raw materials by rail to 

 

3. The plaintiffs premise jurisdiction in their action on 28 

U.S.C. § 1337. We have jurisdiction under 28 U.S.C. § 1291, this 

being an appeal from a final judgment. 
4

Ametek's plant by private rail car. Panther Valley and its 

predecessor had provided rail service over a period of about 

eight years without demurrage charges. The practice of Ametek's 

customers was to alert Ametek as to whether the loaded cars 

should be delivered to Ametek promptly or be held on Panther 

Valley's tracks for later delivery. 

 In 1986, Ametek had a need to store privately owned 

empty and inbounded loaded rail cars for extended periods of 

time. The president of Panther Valley initiated discussions with 

 Ametek's rail consultant concerning a side track agreement 

between Ametek and Panther Valley for such cars. Eventually on 

April 22, 1996, Panther Valley's president submitted a proposed 

side track agreement to Ametek's vice-president in which Ametek 

would lease track to accommodate a seasonal overflow of rail cars 

experienced by Ametek. In August 1986, the president of Panther 

Valley sent a letter to Ametek setting forth the terms of a 

second proposed side track lease agreement. Ametek would pay 

Panther Valley 65 cents per car per day stored on Panther Valley 

track. For reasons unknown to all involved, the agreement "fell 

through the cracks" and was never signed. All parties concede 

that if the agreement were in force, Ametek would not be liable 

for demurrage fees. 

 In 1987, Panther Valley unilaterally imposed a 

demurrage tariff of $20 per car per day for the first two days 

that a company held rail cars beyond a free period of 48 hours. 
5

The tariff increased to $30 for each of the next two days, and 

$40 for each subsequent day. The parties disagree as to whether 

Ametek was informed of this tariff. 

 In the face of severe financial problems, Panther 

Valley, in January 1990, billed Ametek for $297,270 in demurrage 

fees for the period March 15, 1987 through October 2, 1989. 

Ametek refused to pay the invoice, and suggested that the fair 

way to handle the storage problem would be to calculate the 

amount Ametek would owe under the aborted lease agreement, which 

amounted to $29,664.60. Panther Valley rejected this proposal 

because it would not be in its "best financial interest." In 

June 1990, Panther Valley ceased operations and assigned the 

claim to its creditors, six freight carriers (the Interline 

Railroads). 

 On July 23, 1990, the Interline Railroads brought this 

action for demurrage allegedly accrued between March 15, 1987 and 

October 2, 1989 (Ametek I). In response to a motion by Ametek, 

the district court stayed its proceedings and referred one issue 

to the ICC: the reasonableness of Panther Valley's demurrage 

charges. The court specifically retained jurisdiction over all 

other issues. Subsequently, Ametek filed a separate complaint 

with the ICC claiming that the demurrage rates and practices were 

unreasonable. The ICC consolidated the proceedings.4 

 

4. Because the ICC never issued any ruling pertinent to the 

unreasonable practices complaint, the matter became moot and is 

not relevant to this appeal. 
6

 The ICC stated that before it could determine if the 

charges were reasonable, a threshold issue required that it 

determine if the tariff could be applied to Ametek at all. 

Finding that Ametek was merely the agent of its customers and 

neither the consignor nor consignee, the ICC concluded that 

Panther Valley could not impose demurrage fees on Ametek. The 

ICC relied on Middle Atlantic Conference v. ICC, 353 F. Supp. 

1109, 1116-1121 (D.D.C. 1972) (demurrage tariff does not apply to 

agent of party to transportation contract). The ICC found that 

Ametek did not receive, process, or distribute its own materials, 

and that Ametek generally was not the consignor or consignee 

designated on the bills of lading. 

 The Railroads challenged the ICC decision in the United 

States District Court pursuant to 28 U.S.C. § 1336(b) by filing 

another and separate complaint against the ICC (Ametek II). The 

court consolidated Ametek II with Ametek I. The ICC, Ametek, and 

the Railroads moved for summary judgment. The court found that 

the ICC properly addressed the threshold question whether the 

tariff applied to Ametek. The court determined that the ICC 

properly concluded that a demurrage tariff did not apply to a 

company that is not a party to a contract of transportation. The 

court then granted summary judgment for ICC and Ametek. The 

Railroads timely appealed to this court. 

II. 
7

 Before we discuss the substantive issues raised by the 

appellants, the Interline Railroads, we turn to the threshold 

question of the jurisdiction of this court to hear this appeal. 

Ametek contends that the district court lacked jurisdiction over 

Ametek II because the action did not arise out of the question 

referred by the district court as to the reasonableness of the 

demurrage charges.5 Thus, it maintains that the district court 

lacked subject matter jurisdiction pursuant to 28 U.S.C. § 

1336(b), and this court therefore cannot exercise appellate 

jurisdiction.6

 This court exercises plenary review over matters of 

jurisdiction. Anthuis v. Colt Indus. Operating Corp., 971 F.2d 

999, 1002 (3d Cir. 1992). Title 28 of the United States Code 

provides: 

When a district court . . . refers a question or issue 

to the Interstate Commerce Commission for 

determination, the court which referred the 

question or issue shall have exclusive 

jurisdiction of a civil action to enforce, 

enjoin, set aside, annul, or suspend, in 

whole or in part, any order of the Interstate 

Commerce Commission arising out of such 

referral. 

 

5. If the district court lacked jurisdiction over this matter, 

then principles of res judicata would preclude the Railroads from 

pursuing their collection action against Ametek, because the time 

period has long since elapsed during which the Railroads could 

appeal the ICC determination in Ametek's favor. See infra note 

6. 

6. Under the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342, ICC 

orders are directly reviewable in the court of appeals. Under 28 

U.S.C. § 2344, the petition to review must be filed within sixty 

days after the entry of the order. No such petition was filed in 

this case, and thus we would lack original jurisdiction. 
8

28 U.S.C. § 1336(b) (1994) (emphasis added). 

 The district court referred the question of the 

reasonableness of Panther Valley's demurrage rates to the ICC. 

The ICC, however, did not directly reach this question, because 

it determined that the demurrage tariff did not apply to Ametek 

in the first instance. Under § 1336(b), if the question whether 

the tariff applied to Ametek arose out of the referred issue as 

to the reasonableness of the charges, then the district court 

properly exercised jurisdiction over the instant case. 

 The district court itself declined to decide whether it 

had jurisdiction, stating in a footnote that jurisdiction was 

"far from clear." (Union Pac. R.R. Co. v. Ametek, Inc., No. 90-

1396 at 27 n.18 (M.D. Pa. Sept. 8, 1995) (mem.)). The court's 

primary concern was that the ICC's decision regarding the 

threshold applicability of the tariff may have arisen from the 

separate complaint filed by Ametek with the ICC challenging the 

reasonableness of the tariff rates and the tariff practices 

pursued by Panther Valley, rather than from the issue that the 

district court referred to the ICC. 

 In addressing a similar question in Railway Labor 

Executives' Ass'n v. ICC, 894 F.2d 915, 917 (7th Cir. 1990), 

Judge Posner noted: 

The insight behind section 1336(b) is that if a 

question within the purview of the ICC arises 

in the course of a district court proceeding, 

submission of the ICC's answer in the first 

instance to the district court rather than to 

the court of appeals will avoid a cumbersome 
9

and potentially protracted bifurcation of 

judicial review. 

 We do not believe that Congress predicated the 

exclusive jurisdiction of the district court under 28 U.S.C. 

§ 1336(b) on the circumstance that the district court itself must 

invoke the jurisdiction of the ICC by making the referral. We 

think the essence of the section is that the district court 

should have exclusive jurisdiction over review of the referred 

matter even if a party invokes the jurisdiction of the ICC 

whenever the district court makes a referral to the agency. This 

interpretation of the law avoids problems arising out of parallel 

proceedings in different courts arising out of a single 

controversy. 

 In its ruling in this case, the ICC stated that 

"[w]hile the primary issue raised by the court referral is the 

reasonableness of the demurrage charges, before we analyze the 

reasonableness of charges we must determine if the demurrage 

charges apply. If demurrage charges do not apply, their 

reasonableness is not an issue." Ametek, Inc. v. Panther Valley 

R.R. Corp., No. 40664 at 3 (ICC Jan. 15, 1993) (decision & order) 

(citations omitted). This is a common sense and logical approach 

to an analysis of the reasonableness of the charges and the 

relationship between the Railroads and the alleged debtor. 

 Citing to Island Creek Sales Co v. ICC, 561 F. 2d 1219 

(6th Circuit 1977), the dissent suggests that we are interpreting 

§ 1336(b) "loosely." Dissent at 4. Island Creek, however, did 
10

not construe § 1336(b) and dealt only with the interpretation of 

§ 1336(a). Interpreting that section, the Court of Appeals for 

the Sixth Circuit concluded that the petitioners in the case 

before it sought "more than money. They challenge the 

fundamental power of the Commission to issue Car Service Order 

No. 1050 and the method used to promulgate the demurrage 

increases." Id at 1222. Thus, this case from a sister circuit 

has no precedential or persuasive value. 

 The dissent also cites Empire-Detroit Steel Division of 

Cyclops Corp. v. ICC, 659 F.2d 396 (3d Cir. 1981), for the 

proposition that this court has "adopted Island Creek's strict 

interpretation of the district court jurisdiction under § 

1336(a)." Dissent at 4. Far from supporting the dissent's 

position, Empire-Detroit merely reiterates the widely accepted 

view that review of ICC decisions which are based upon "legal or 

policy grounds" lies with the court of appeals. Empire-Detroit, 

659 F.2d at 397. In the case at bar, the ICC decision was based 

largely upon a factual determination and upon a related matter 

emanating from a referral by the district court. It had no 

effect upon the public at large or the powers and policies of the 

ICC. 

 We conclude that the ICC's decision can fairly be 

characterized as related to and arising out of the district 

court's referral and that the district court properly exercised 

jurisdiction over Ametek II. They were parallel proceedings 
11

arising out of a single dispute and the district court's exercise 

of jurisdiction avoided "cumbersome and potentially protracted 

bifurcation of judicial review." We therefore hold that the 

district court had subject matter jurisdiction over this matter 

pursuant to 28 U.S.C. § 1336(b), and that we have appellate 

jurisdiction under 28 U.S.C. § 1291. 

III. 

 We next consider whether the district court applied the 

correct standard of review to the ICC ruling. In its opinion 

granting summary judgment for the ICC and Ametek, the district 

court stated that "[b]ecause it is evident that the ICC was not 

engaged in tariff interpretation, but instead applied its policy 

to an otherwise uncontested determination that Ametek was not a 

party to a contract of transportation, judicial review is 

properly limited to ascertaining whether the ICC decision is 

arbitrary, capricious or an abuse of discretion." Union Pac. at 

22. The Railroads argue that the court should have reviewed the 

ICC's decision de novo because the ICC was merely interpreting 

common law agency principles. 

 In Hi Craft Clothing Co. v. NLRB, 660 F.2d 910, 915 (3d 

Cir. 1981), this court stated that when an issue falls outside of 

an agency's area of expertise, and the courts have special 

competence in that area, there is little reason for the court to 

defer to the agency's interpretations. And in the instant case, 
12

the ICC acknowledged that the "courts are the primary authority 

on matters such as agency and contract law." Panther Valley at 

4. However, the application of agency law was not necessary to 

the ICC's determination.7 The Railroads concede in their brief 

to this court that "[t]he bills of lading . . . in almost all 

cases listed Ametek as the agent for the consignee or the 

consignor." Although the district court correctly applied the 

abuse of discretion standard, we also note that, in fact, the 

court engaged in a far more searching analysis of the ICC 

determination. We conclude that the ICC merely applied its own 

policies to uncontested matters of fact, and that the district 

court committed no error in its standard of review. 

IV. 

 We turn now to the central issue in this case: Whether 

the district court erred in accepting the ICC's determination 

that the Panther Valley demurrage tariff could not be applied to 

Ametek. This inquiry involves two separate questions. First, 

did the court err in adopting the ICC's conclusion that the 

demurrage tariff may not be applied to Ametek because Ametek was 

not a party to the underlying transportation contracts? Second, 

 

7. Indeed, it might be argued that a finding of agency was 

superfluous; that it would have been sufficient simply to 

determine that Ametek was not a party to the day to day 

transportation contracts. See, e.g., Southern Pac. Transp. Co. 

v. Matson Navigation Co., 383 F. Supp. 154, 157 n.5 (N.D. Cal. 

1974). 
13

did the court err in concluding that no other contractual basis 

exists which would allow the Railroads to apply the tariff? 

A. 

 In its memorandum opposing the Railroads' motion for 

summary judgment, the ICC recites its "longstanding policy not to 

extend demurrage tariffs to persons who are not parties to the 

transportation contract."8 The ICC decision itself states that 

"the Commission has applied this legal principle in a number of 

cases," and cites particularly to Payment of Detention Charges, 

Eastern Central States, 332 I.C.C. 585, 588 (1968), aff'd 335 

I.C.C. 537 (1969) (unlawful to "place liability for detention 

charges9 upon a person not a party to the contract of 

transportation"). 

 With little federal court precedent upon which to draw, 

both the ICC and the district court in this case relied primarily 

upon Middle Atlantic Conference v. ICC, 353 F. Supp. 1109 (D.D.C. 

1972) (unlawful to impose liability for demurrage charges upon 

agent who was not a party to the transportation contract). After 

 

8. The policy extends at least as far back as 1920. See New 

York Board of Trade v. Director General, 59 I.C.C. 205, 209 

(1920) (noting that a "steamship company is not a party to the 

contract of transportation over the rail lines and cannot be held 

liable by the rail carrier for demurrage"). 

9. "Detention" and "demurrage" are terms used by motor carriers 

and railroads, respectively, to describe the same thing. The 

legal principles discussed apply to both motor carrier detention 

and railroad demurrage charges. 
14

speaking approvingly of the Eastern Central decision, the court 

in Middle Atlantic noted that "[t]he law is well settled that an 

agent for a disclosed principal is not liable to a third person 

for acts within the scope of the agency." 353 F. Supp. at 1120-

21 (citations omitted). 

 In the instant case, it is undisputed that Ametek was 

not a party to the transportation contracts. We therefore 

perceive no error by the district court in adopting the ICC's 

determination that liability for the demurrage tariff could not 

be imposed on Ametek as the consignee or an agent of the 

consignor. 

B. 

 The Railroads argue that the ICC and the district court 

failed to address an exception to the general rule as stated in 

Part IV A supra: that agents may assume liability contractually. 

 The Railroads assert that Ametek separately agreed to the 

demurrage liability in the instant case. This court reviews the 

district court's finding of facts for clear error. See North 

River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1203 (3d 

Cir. 1995). 

 The court in Middle Atlantic stated the exception to 

the rule of non-liability for agents: "Certainly warehousemen 

are free to assume liability for detention charges by contractual 

undertaking . . .. " 353 F. Supp. at 1121-22. The Railroads 
15

contend that Ametek independently agreed to be liable for the 

demurrage tariffs. They assert that Ametek hired a railroad 

consultant and negotiated the failed lease agreement to avoid the 

demurrage costs. Thus, the Railroads conclude that Ametek was 

aware of its liability, and chose to limit it through a 

negotiated agreement. In the absence of the track or lease 

agreement, they argue, Ametek is liable for the full demurrage 

cost. 

 The district court noted that an agent may agree to be 

liable for demurrage charges, but found that there was no such 

agreement between Ametek and Panther Valley. The court discussed 

the proposed rental agreement between the parties, but pointed 

out that the parties never signed the agreement and aborted it. 

The court noted that the Railroads presented no evidence that 

Ametek ever intended to agree to demurrage fees. Past dealing 

between the parties reveal that neither Panther Valley nor its 

predecessor, Conrail, ever charged Ametek with a demurrage 

tariff. Further, as the district court noted, Panther Valley was 

free to seek demurrage charges from Ametek's clients, the actual 

parties to the shipment contracts. 

 We find no error in the district court's finding of 

fact that Ametek and Panther Valley never entered into a contract 

binding Ametek to the payment of demurrage fees. There is no 

evidence that Ametek intended to assume contractual liability for 

the demurrage charges. We have only a proposed draft of a 
16

contract which was never signed and is thus, of course, 

unenforceable. Neither we nor the district court are in a 

position to speculate as to Ametek's motivations in entering into 

the contract negotiations. We see no error in the district 

court's decision that no contractual exception to the agent nonliability rule is present in this case. 

V. 

 We conclude that the district court committed no error 

in adopting the ICC's determination that Ametek may not be held 

liable for demurrage charges under Panther Valley's tariff. 

Ametek was not a party to the underlying transportation 

contracts, and it did not separately agree contractually to 

accept liability. 

 Accordingly, the summary judgment in favor of the ICC 

and Ametek will be affirmed, as will the order of the district 

court denying the motion of the Interline Railroads for summary 

judgment. Costs taxed against the appellant Railroads. 
17

 Union Pacific Railroad, et al. v. Ametek, Inc.

 No. 96-7015 

 

 

Roth, Circuit Judge, Dissenting: 

 I respectfully dissent from the majority’s opinion 

because I do not think the district court had jurisdiction to 

review the ICC’s order in this case. 

 Except as otherwise provided by Congress, Title 28 

U.S.C. §2321 vests exclusive jurisdiction in the federal courts 

of appeal to “enjoin or suspend, in whole or in part, a rule 

regulation, or order” of the Interstate Commerce Commission (now 

Surface Transportation Board). 28 U.S.C. §2321. In addition, 

under 28 U.S.C. §2342(a), “The court of appeals . . . has 

exclusive jurisdiction to enjoin, set aside, suspend (in whole or 

in part), or to determine the validity of ... (5) all rules, 

regulations or final orders of the [ICC] made reviewable by §2321 

of this title.” As these statutes demonstrate, the courts of 

appeal ordinarily have jurisdiction over cases in which a party 

seeks to challenge an ICC decision. 
18

 I recognize that there are exceptions to this general 

rule. For example, under 28 U.S.C. §1336(b), a district court 

retains exclusive jurisdiction over a civil action to review an 

ICC order when that order arises out of a prior referral. 

However, I conclude that the ICC’s order in this case does not 

fit the “arising out of” language of § 1336(b). 

 Ametek initially sought to have the district court 

refer two issues to the ICC: the reasonableness of Panther 

Valley’s rates and the reasonableness of Panther Valley’s 

practices in negotiating a contract to force Ametek to pay 

demurrage charges. The district court, however, specifically 

limited its referral to one issue, the reasonableness of Panther 

Valley’s rates. Ametek then filed a separate proceeding directly 

with the ICC regarding the reasonableness of Panther Valley’s 

practices. The ICC consolidated this separate proceeding with 

the issue already referred to it by the district court. The ICC 

then issued an opinion declaring Ametek not liable for demurrage 

charges under common law principles. The ICC did not rule on the 

reasonableness of Panther Valley’s rates. 

 I disagree with the majority that the ICC’s decision 

regarding Ametek’s liability for demurrage charges arose out of 

the district court’s referral within the meaning of §1336(b). 

True, the ICC may have felt that a decision regarding the 

reasonableness of Panther Valley’s rates dictated a determination 

of whether the rates applied at all. Nevertheless, the ICC’s 
19

legal authority for making this determination did not originate 

in the district court referral. It was specifically presented to 

the ICC in Ametek’s separate action filed directly with the ICC. 

 Moreover, the ICC acknowledged that it was going beyond 

the scope of its expertise and, indeed, beyond the specific 

referral from the district court when it stated: 

We are aware that courts are the primary authority on 

matters such as agency and contract law. However, 

where the applicability and reasonableness of 

interstate railroad transportation contracts are at 

issue, our expertise and precedents are also due 

consideration. See 49 U.S.C. 10501(d). 

The ICC’s invocation here of 49 U.S.C. §10501(d) is significant 

because it demonstrates that the Commission was relying not on 

the district court’s referral, but on the ICC’s own inherent 

authority to review the rules and practices of rail carriers.10 

 Furthermore, when the district court affirmed the ICC’s 

authority to consider the issue of liability, the district court 

suggested that it was Ametek’s separate complaint which provided 

the ICC with the authority to rule on Ametek’s liability for the 

charges. The court first noted that 

 

 

10§ 10501(d) states in pertinent part: “The jurisdiction of 

the Commission . . . over transportation by rail carriers, and 

the remedies provided in this subtitle with respect to the rates, 

classifications, rules, and practices of such carriers, is 

exclusive.” 
20

 [B]ecause 49 U.S.C. §11701(b) permits the ICC to dismiss only 

those complaints filed with it that fail to “state 

reasonable grounds for investigation and action,” the ICC 

was statutorily obligated to address the separate 

complaints filed by Ametek. 

 Union Pac. R.R. Co. v. Ametek, Inc., No. 90-1396 at 15 (M.D. Pa. 

Sept 8, 1995) (mem.). The district court went on to state: 

Notwithstanding the parties’ agreement that this Court has 

jurisdiction over the ICC Decision pursuant to 28 U.S.C. § 

1336(b), I am constrained to note that jurisdiction is far 

from clear. . . . Only the reasonableness of demurrage 

rates was referred to the ICC in this case. While it may 

have been proper for the ICC to address the threshold 

question of tariff applicability, that issue was presented 

as a result of separate complaints filed by Ametek. It 

thus could be argued that the ICC Decision does not arise 

out of the referral in this case, so that any challenge to 

the ICC Decision should have been pursued in the 

appropriate court of appeals. 

Union Pac. R.R. Co., No. 90-1396 at 27 n.18 (emphasis added). I 

agree with the district court’s statement that one could argue 

that the ICC’s authority to consider Ametek’s liability for 

demurrage charges did not stem solely from the district court’s 

referral. In fact, the ICC’s authority to consider the 

reasonableness of Panther Valley’s practices stemmed from 

Ametek’s separate proceeding filed directly with the ICC. I 

conclude, as a consequence, that the district court lacked 

jurisdiction to review the ICC’s order under §1336 (b). 

 My conclusion is supported by a similar situation which 

the Sixth Circuit confronted in Island Creek Sales Co. v. I.C.C., 

561 F.2d 1219 (6th Cir. 1977). In Island Creek, the court 

interpreted the scope of the jurisdiction under 28 U.S.C. 

§1336(a), which provides for district court review of ICC orders 
21

that concern the payment of money or collection of fines. The 

shippers challenged the ICC’s power to promulgate certain 

demurrage increases. Since the case involved the validity of the 

ICC’s order for the payment of money and not just the amount 

payable, the Sixth Circuit held that the case was within the 

appellate court’s exclusive jurisdiction. Id. at 1222. The 

nature of the issue to be reviewed -- the ICC’s power to 

promulgate increases and not merely the amount of the increase -- 

placed the appeal beyond the scope of the narrow jurisdictional 

exception created for the district court by § 1336(a). 

 Island Creek is analogous to this case because it 

involves the scope of the jurisdiction for district court review 

created by §1336. Moreover, we have adopted Island Creek’s 

strict interpretation of district court jurisdiction under 

§1336(a) in Empire-Detroit Steel Division of Cyclops Corp. v. 

I.C.C, 659 F.2d 396 (3d Cir. 1981).11 I see no reason to apply a 

strict interpretation to §1336(a) and a looser interpretation to 

§1336(b). The majority seem, however, to interpret §1336(b) 

loosely. I believe to the contrary that we should interpret 

§1336(b) strictly and limit district court appellate jurisdiction 

to the express language of the statute. 

 

 

11In Empire-Detroit we stated: “We agree with those courts 

of appeals which have held that review of orders denying 

reparations on legal or policy grounds is available by petition 

for review in the courts of appeals.” Empire-Detroit, 659 F.2d at 

397. 
22

 Finally, I disagree with the majority’s reliance on 

Judge Posner’s opinion in Railway Labor Executives’ Association 

v. I.C.C., 894 F.2d 915 (7th Cir. 1990). In RLEA, the Seventh 

Circuit interepreted the referral language of § 1336(b) and 

concluded that district courts must make some positive 

“reference” to the ICC in order to invoke the referral 

jurisdiction provided by the statute. The purpose of such a 

reference is “so that the parties can be in no doubt of which 

court to go to for judicial review of the ICC order.” Id. at 

917.12 In a situation such as the case before us, where the ICC 

has simultaneously considered a question referred by the district 

court and a proceeding filed directly with the ICC, it seems to 

me that a bright line rule is most helpful to the parties in 

determining where to file an appeal. I submit that only those 

issues should be appealed to the district court which were 

expressly referred to the ICC by the district court. I do not 

concur in the majority’s implication that the word “order,” as it 

is used in §1336(b), is broader in scope than the word “issue.” 

To the contrary, I believe the statute provides for district 

court review of solely those issues it has referred to the ICC. 

Any other issues decided by the ICC in a parallel proceeding, 

such as we have here, should be appealed to the court of appeals. 

 

 

 

12The issue in RLEA was whether the transmittal of a 

question by the bankruptcy court to the ICC was a “referral” if 

the word “refer” was not employed. The court concluded that it 

was a referral. 
23

 The application of such a strict interpretation of § 

1336(b) would reduce the chance that appeals are made to the 

wrong court. Counsel need only look to the language of the 

district court’s referral to determine whether the issue was 

properly reviewable by a district court under §1336(b). If the 

issue was not one specifically referred to the ICC by the 

district court, it would be reviewable only by the court of 

appeals. This regime would eliminate uncertainty among the 

parties and obviate complicated inquiry over the exact source of 

the ICC’s authority to determine a separate issue, be it the 

referral, a separate proceeding, or some other statute. 

 Because the propriety of Panther Valley’s practices 

was not an issue referred to the ICC by the district court, I 

conclude that the appeal of that issue should have come directly 

to the court of appeals. For this reason, I find that the 

district court should not have heard the appeal from the ICC and 

I respectfully dissent.